You may easily imagine that you have a handle on your finances. You pay bills on time, save a little, and perhaps splurge once in a while. Well, money can slip through the cracks in ways we don’t expect and we might be losing it without even realizing. Often, it’s not the big expenses that hurt our wallets, but a string of little, unobserved habits or fees that quietly empty our pockets. It’s like a slow leak in a bucket.
If you’re not seeing your savings grow as quickly as you’d like or you’re scratching your head trying to figure out where all your money is going even with a budget, it may be time to take a closer look. These are some subtle signs you may be losing money without you knowing it. Knowing these will help you stop the “leaks” and keep more of what you earn.
Subscription Services Overlap
With streaming and subscription boxes, it’s easy to forget what you’re subscribed to. There are many people who have subscriptions to similar services, for example, two different streaming platforms they don’t use or multiple food delivery apps. While you tend not to notice these monthly charges, they can add up to take a big chunk out of your budget. By regularly reviewing your subscriptions, you can see what isn’t worth the expense.
Not Shopping Around for Insurance
Insurance is one area where loyalty doesn’t always pay. Many people just continue to be with the one that they’ve had for whatever number of years without realizing that they might get a better rate elsewhere. Many times, companies hold back their best deals for new customers, which means you might be paying too much for your policies. Research has found checking rates every year or two can mean big savings on car, health and home insurance.
Small Impulse Purchases Tend to Be Ignored
While it’s easy to wave off a $5 coffee here or a $10 downloaded app there, they add up fast. According to psychologists, we underestimate how much we spend on small, frequent purchases that can take more money than we think. Even minor impulse buys can be tracked and become a big reason why savings aren’t growing over time.
Skipping Credit Card Rewards
If you’re not using rewards programs on credit cards, you’re leaving money on the table. Cash back, travel points, and discounts are available with many credit cards, and these can save you much money, if used wisely. Of course, you want to pay off balances each month to avoid interest. Skipping rewards can make you miss out on money that could be put toward future expenses.
Paying Hidden Bank Fees
With the fine print banks are known for, fees can creep in, such as overdraft charges, ATM fees, and minimum balance penalties. While these charges might seem insignificant, eventually they can become a large sum. Bankrate reports that Americans pay an average of $8 a month in bank fees, or nearly $100 a year, just disappearing from your account.
Letting Gift Cards Expire
Just like mini banknotes, gift cards tend to be untouched or misplaced in a wallet or drawer. This forgotten money could have been spent on the essentials or perhaps even saved. Gift cards don’t remain valid forever so be sure to check for expiration dates and spend them promptly, to avoid losing their whole value.
Not Paying Attention to Your Credit Score
Just having a low credit score can also cost you money. Individuals with poorer credit scores usually end up paying higher insurance fees, or they end up not getting any job. Monitoring your credit report, correcting errors, can save you money down the road. You can catch small problems early by using the free tools to monitor your credit and before they turn into bigger problems.
Leaving Appliances Plugged in
Leaving electronics and appliances plugged in — even when they’re off — can still consume electricity at a cost. This is known as ‘phantom energy use’ and it can really add up to your electric bill. The U.S. Department of Energy reckons that accounting for phantom power in total energy use for an average household is upward of 5-10 percent or hundreds of dollars a year.
Overpaying for Brand Names
Often, we are attracted to familiar brands thinking that they’re better than ‘store’ or generic brands. Brand name products, from groceries to prescription pills, often cost more than their generic options without — oftentimes — providing better quality. Buying generics when purchasing items such as basic household goods can save you a lot.
Unused Services Automatically Renew
From gym memberships to software subscriptions, it’s easy for many services to continue to charge our accounts year after year without our permission. If the service doesn’t send a reminder, these fees can continue unnoticed. One way to keep from paying for services you don’t need or rarely use is to annually review automatic renewals.
Eating Out Too Often
Eating out or getting takeout can be a quick and easy way to get meals, but it’s usually much more expensive than cooking at home. It is okay to treat yourself, but if it becomes a habit, it burns through money much quicker than you think.
Buying Now, Paying Later
Too many retailers offer ‘buy now, pay later’ options, which can be enticing when you want to go a little beyond your budget. But if payments aren’t handled carefully, they can result in debt and make it all too easy to overspend. Payments on these plans won’t be made, which could lead to late fees and have a negative effect on your credit rating — and that can have far longer lasting financial consequences.
Disclaimer: This list is solely the author’s opinion based on research and publicly available information.
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